Why Owning Real Estate Will Help You Retire Faster, Healthier, and Wealthier

Creating an effective retirement plan deserves a significant investment of your time, and the earlier you start planning, the better. Depending on where you are in your life, you might not be thinking about retirement. However, it’s never too early to start because some of the best retirement plans become more profitable with time, especially with owning and investing in real estate.

If your goal is to retire happy, healthy, and wealthy, consider getting into real estate investing. It doesn’t matter if it’s residential, commercial, or industrial – if you have the capital, the credit, and the time, it’s worth pursuing.

Owning real estate is the ultimate retirement strategy

If you want to retire faster, healthier, and wealthier, consider looking into real estate properties because there are several key benefits you won’t find in other opportunities.

When you invest early enough, owning rental properties is a highly effective retirement strategy that won’t take up too much of your free time (when done right).

When you think about retirement, you probably have the following goals/needs:

• To retire as quickly as possible
• To retire as rich as possible so you never run out of money and can spend freely
• To be healthy and in good spirits
• To have a reliable source of income
• To have someone else manage your technical tasks so you have more free time

Investing in real estate can help you achieve all of these goals and more.

How real estate can help you retire faster

Who doesn’t want a fast retirement? If you ask most people, they’ll probably agree that retiring as early as possible sounds like an excellent idea. Just because the official retirement age is 65 doesn’t mean you can’t retire before that. That number is just when you’re allowed to start collecting Social Security benefits. You can retire at 40 if you really want, although most people don’t because it takes them more time to save up enough money. Owning rental properties can help you retire faster if you’re willing to put in the work ahead of time.

According to FortuneBuilders.com, the elements needed for a successful early retirement are:

• Realistic goals with measurable outcomes
• Basic financial literacy
• Cash flow requirements for becoming financially free
• Buying the right type of properties
• Maintaining your properties in good condition to preserve their value
• Continuing to build your portfolio

Obviously, the sooner you start investing, the better. However, don’t be afraid to start buying investment properties at any age. Now is always the perfect time to start.

How real estate investments can help you retire wealthy

Hopefully, you’re planning on diversifying your portfolio with various stocks, bonds, and maybe even stock market investments. It’s never a bad idea to have multiple types of investments because you never know what fluctuations will impact you the most. However, real estate investing has a much higher profit potential because rental income generally pays more than dividend income and bond yields. For instance, the income yield from rent can be between 6% and 8% annually.

If you’re new to real estate investing, it’s important to remember that you won’t start raking in the high profits right away. Not in the first year or even after five years (unless you’re able to pay in cash and skip the mortgage). However, as time passes, you’ll gain equity in your properties as you pay off your mortgage. Once you get this going, your properties will begin to generate positive cash flow on a monthly basis.

You’ll need to invest in multiple properties to earn any kind of significant income, so keep that in mind. Real estate investing isn’t a get-rich-quick scheme, but it can make you rich over time when you invest in numerous profitable properties, and you have the patience to wait for them to become profitable.

What is an example of profitability?

Let’s say you choose to buy four single-family homes for $300,000 each. You’ll need to make about a 20% down payment on each one, which amounts to $24,000. If you charge $2,000 per month in rent for each property, you’ll be earning an 8% return on your investment based on the property purchase price of $300,000.

Now, say your expenses, including the mortgage, insurance, and other applicable fees, add up to $1,500/month per property. You’ll end up with $500 cash flow each month per property, which is $2,000 per month and $24,000 per year.

It’s easy to see how you can significantly increase your profits just by acquiring more properties. In fact, that’s how wealthy real estate investors make their money. They own a large number of properties that all generate regular income.

When you do get to the point of owning a large number of properties, you’ll definitely want to hire a professional property management company because it’s not a job for one person, and certainly not when you’re retired.

Although it will be another expense, it’s justified and supports your profitability. Having a property manager…